Mercury NZ (ASX:MCY) Expands Wind and Geothermal Capacity After FY26 Results

Aditi Sarkar

12 November 2026 10:17 PM AEDT

Mercury NZ (ASX:MCY) Expands Wind and Geothermal Capacity After FY26 Results

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Highlights

Mercury NZ (ASX:MCY) reported NZD 1.068 billion FY26 EBITDAF.
FY26 Operating Cash Flow reached NZD 762 million.
Three major renewable projects began generating electricity in 2026.
Mercury guided to NZD 1.075 billion EBITDAF in FY27.

Mercury NZ Limited generates renewable electricity from hydro, geothermal and wind Assets in New Zealand and retails energy and other household services. Mercury NZ (ASX:MCY) ended the 12 November 2026 ASX session at AUD 5.43. The company’s FY26 disclosures centre on higher generation earnings, the start-up of renewable projects and a further wind investment, with hydrology and commissioning schedules important to the next reporting period.

Renewable Generation and Customer Services

Mercury (ASX:MCY) owns and operates hydro, geothermal and wind generation assets and supplies electricity and gas to customers. It also offers broadband and mobile services through its retail operations. The company states that its generation portfolio produces electricity from renewable sources. Hydro output depends on water availability, geothermal stations provide a different generation profile, and wind production changes with weather. Combining these sources diversifies generation, but none eliminates exposure to demand, wholesale electricity pricing or asset availability.

Three Projects Begin Generation

During 2026, generation began at the Ngā Tamariki Geothermal Station expansion, Kaiwera Downs 2 Wind Farm and Kaiwaikawe Wind Farm. Mercury said these projects represent approximately NZD 1 billion of Investment and an expected 1.1 TWh of additional annual output once fully operating. The company expected all three to be fully operational by the end of 2026. Ngā Tamariki’s new unit came online in January, construction at Kaiwera Downs 2 finished in June with commissioning continuing, and first generation at Kaiwaikawe occurred in July. Mercury (ASX:MCY) therefore has several near-term delivery milestones rather than a single project completion date.

FY26 Financial Performance

For the year ended 30 June 2026, Mercury reported EBITDAF of NZD 1.068 billion, an increase of 36% from FY25. Net profit after tax was NZD 321 million, up NZD 320 million, while operating cash flow was NZD 762 million. Mercury invested NZD 710 million, or 66% of EBITDAF, in existing and new renewable generation assets. Its FY26 ordinary Dividend was 27 New Zealand cents per share, including a final dividend of 17 cents. These figures distinguish cash generation, Capital Expenditure and Shareholder distributions rather than treating Earnings as funds entirely available for dividends.

Further Wind Investment and Demand

In August 2026, the board approved the NZD 506 million Puke Kapo Hau wind project, also described as Mahinerangi Stage 2, subject to final grid connection studies. Combined with Stage 1, the wind development was expected to have 228 MW of capacity and 646 GWh of annual generation. Mercury also entered a 140 MW power purchase option agreement with Datagrid and acquired a 12.7% stake in Datagrid NZ for NZD 53 million. Mercury (ASX:MCY) is pairing additional generation plans with potential demand, although contract Options do not guarantee all forecast consumption.

Outlook and Operating Risks

Mercury’s FY27 guidance was EBITDAF of NZD 1.075 billion and a dividend of 29 New Zealand cents per share. The forecast incorporated new generation, costs and 4.1 TWh of hydro production. Guidance remains subject to changing hydrological conditions and other events. Construction delivery, geothermal performance, transmission connections, wholesale prices and capital requirements will be relevant in subsequent financial reports. Management also indicated an adjusted debt-to-EBITDA ratio of 2.0 times in its FY26 release.

Additional Operating Considerations

The Ngā Tamariki expansion was reported to add approximately 390 GWh of annual generation, while the new wind projects contribute to Mercury’s expected overall output increase. During FY26, stay-in-business capital expenditure was NZD 150 million and operating costs were reported at NZD 370 million. The company also launched flexible time-of-use retail rates in June. These initiatives address different parts of the electricity value chain: generation availability, ongoing asset maintenance and customer usage patterns. Reported financial performance will depend on whether the commissioned assets deliver their expected electricity volumes.

Key Insights

Mercury (ASX:MCY) reported higher earnings and cash flow while directing substantial spending into renewable generation. The commissioning of three projects and approval of another wind farm provide identifiable milestones for FY27. Future results will show whether output assumptions and cost controls translate into the company’s published guidance.

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